Hang Seng Index, ASX200, Nikkei 225: Hang Seng Up on US Stats

Key Insights:

• It was a mixed morning, with the ASX 200 and the Hang Seng making early gains.
• US economic indicators eased fears of a US hard landing while avoiding a surge in bets on a July interest rate hike.
• This morning, the Bank of Japan held interest rates unchanged and reiterated its commitment to ultra-loose.

Market Overview

It was a mixed Friday morning session for the Asian markets. The Hang Seng Index and ASX 200 found support, while the Nikkei struggled despite a stronger USD/JPY.

Overnight, US economic indicators were market-friendly, with retail sales unexpectedly rising and jobless claims holding steady. US jobless claims held steady at 262k versus a forecasted decline to 250k, while retail sales increased by 0.3% in May.

Manufacturing sector numbers sent mixed signals. The all-important Philly Fed Manufacturing Index fell from -10.4 to -13.7, with the prices paid index falling from 10.9 to 10.5. The NY Empire State Manufacturing Index beat forecasts, rising from -31.8 to 6.6, though unlikely to influence the Fed.

While the numbers eased the fear of a hard landing, there was no material impact on sentiment toward the Fed.

According to the CME FedWatch Tool, the probability of a 25-basis point July rate hike stood at 67.0% on Thursday, up from 62.3% on Wednesday.

The NASDAQ Composite Index rose by 1.15%, with the Dow and S&P 500 seeing gains of 1.26% and 1.22%, respectively.

This morning, there were no economic indicators for investors to consider. However, the Bank of Japan delivered its June policy decision. The Bank of Japan held interest rates unchanged at 0.10% and maintained the 0% cap on the 10-year bond yield, which falls under the Bank’s yield curve control (YCC) policy.

ASX 200

The ASX 200 was up 0.64% this morning, with bank stocks providing further support.

The big-4 had a bullish morning. Westpac Banking Corp (WBC) gained 0.75%, with The Commonwealth Bank of Australia (CBA) and The National Australia Bank (NAB) rising by 0.58% and 0.53%, respectively. ANZ Group (ANZ) was up 0.11%.

Mining stock had a mixed morning. Rio Tinto (RIO) and Fortescue Metals Group (FMG) were down 0.43% and 1.25%, respectively, while BHP Group Ltd (BHP) rose by 0.17%. Newcrest Mining (NCM) gained 1.35%.

Oil stocks had a bullish morning. Woodside Energy Group (WDS) and Santos Ltd (STO) rose by 2.56% and 2.67%, respectively. Brent Crude was down 0.34% to $75.41 this morning.

Hang Seng Index

The Hang Seng was up 0.71% despite investor sentiment toward the waning Chinese economy.

Considering the main components, Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) saw gains of 1.30% and 2.13%, respectively.

However, bank stocks had a mixed morning session. HSBC Holdings PLC and The Industrial and Commercial Bank of China (HK:1398) saw gains of 0.92% and 0.24%, respectively. China Construction Bank (HK: 0939) was flat.

CNOOC (HK: 0883) rose by 1.25%, a weaker dollar supporting crude oil prices overnight.

Nikkei 225

The Nikkei 225 was down 0.54% this morning. However, the Bank of Japan stayed ultra-loose, which should provide support ahead of the BoJ Press Conference.

From the banking sector, Sumitomo Mitsui Financial Group (8316) and Mitsubishi UFJ Financial Group rose by 0.61% and 0.10%, respectively.

Looking at the main components, Sony Corp (6758) slid by 1.72%, with Tokyo Electron Limited (8035) and KDDI Corp (9433) seeing losses of 1.28% and 1.53%, respectively. Fast Retailing Co (9983) fell by 0.33%, while SoftBank Group Corp. (9984) gained 0.09%.

Check out our economic calendar for economic events.